This article has two audiences: one who is not already well informed about the events of the past week, and one who is. If you fall into the later category, feel free to skip the first section, which simply provides a summary of the events following Crunchyroll changing they way they encoded newly-airing shows.
The Crunchyroll Bitrate Saga:
Unless you have been living under a rock for the past week, you will have doubtless already heard about the problems regarding Crunchyroll's video quality. I won't recap everything that happened here, and I'll try to avoid speculating about Crunchyroll's internal politics as I have no way of verifying them, but I'll try to summarize as best I can: last weekend, newly-airing episodes of shows on Crunchyroll's website were released with very low-bitrate encodes, much to the dismay of many of us users. In actual fact, this had been going on behind the scenes for already-aired content for many months, but the majority of people using the site watch episodes shortly after airing, and pirates who rip content from the site also do so immediately after it is posted, so these changes went largely under-reported. This latest change to include the latest airing episodes, however, trigged a significant backlash following this detailed article by Daiz that went viral shortly afterwards.
It took Crunchyroll several days to come up with a satisfactory response, which only added fuel to the fire. I do not personally blame their media managers for this, but rather their engineering team for not putting together a statement immediately. Crunchyroll claims in this forum post that these lower-quality settings were, in fact, just a mistake—something which still stretches the imagination, but which I cannot disprove, either—and they vowed to resolve this for both newly-airing and archived shows. I do have to note that they also did immediately revert to using the old encoding settings for newly-airing content, which minimized the effects these lower-quality encodes had on the majority of their users. Although Crunchyroll's post lacked specific details, it did promise a technical post by the site's engineers regarding updated encoding settings, which Ellation, the company handling their video infrastructure now, posted the following day. They backed this up with newly-encoded episodes using these settings.
Alas, this third set of encodes leave much to be desired. Despite consuming nearly twice the bandwidth, they offer little improvement over Crunchyroll's old settings from 2012, and even look worse in some high-action scenes, not to mention they still have inferior audio quality to virtually every TV broadcast in Japan. Nevertheless, Crunchyroll itself seems very open to accepting feedback regarding these settings—I have been in communication with a certain individual who has been passing along specific encoding feedback, but their efforts are being hampered by Ellation's use of a proprietary front-end for x264. I won't spend too much time talking about specific encoding settings, though, as I'm still hoping they change in the near future as a result of this feedback. In any case, that is where we find ourselves now.
A Grim Future for Niche Streaming:
This brings me, finally, to the subject of this piece: in the age of streaming video, there are no quality standards, and that is the root of the problem as I see it. Media distributors have never had to think very hard about video quality in the past, as physical media standards dictate those. These standards are drafted by experts and industry insiders who genuinely care about image and sound quality, so this leveled the playing field when it came to content delivery. However, no such standards exist for video-on-demand and other streaming platforms. In fact, the leaders in this field, Netflix and Amazon, are very secretive about the encoding methods they use, because when it comes to streaming, it is compression ratios, not absolute quality, that companies strive for, and the nature of the streaming market today incentivises them to keep any competitive edge proprietary. This only deepens the divide in relative image quality between platforms like Netflix, who can afford the best engineers and encoding experts in the world, and smaller niche platforms like Crunchyroll. As we've seen in the ongoing Net Neutrality debate, big content delivery platforms want to leverage every advantage they can to crush competition by being the site that buffers the fastest. Perhaps, though, it won't take a legal ruling on Net Neutrality if those platforms can leverage their investment capital to continue to out-engineer the competition. In the winner-takes-all economy, it is always going to be an uphill battle for smaller platforms.
An Appeal to Crunchyroll and Ellation:
Unlike so many niche segments, the anime scene in particular has a unique advantage: a community of video encoding experts with extensive experience optimizing open-source encoding software for animated content. Yes, I'm talking about fansubbers. Crunchyroll has shown in the past that it values the expertise of this community, so I implore them do the same with regards to video encoding. I firmly believe that it is this willingness to deliver anime the way that fans had been consuming it back when fansubs were the only option (using softsubs, delivering it in HD, and focusing on speed) that has made Crunchyroll so successful, and has curbed piracy so effectively these last few years. Don't throw that away by following the same doomed path of all the other niche streaming sites that will inevitably fold under pressure from the likes of Netflix and Amazon. In seeking this expertise, you would be joining the ranks of the German streaming site Kazé and the Italian licensor Dynit, both of whom produce encodes superior to those of the original Japanese publishers precisely because they hired former fansubbers.
An Appeal to Fans:
As things stand now, things are about where they were before with regards to video quality, but things could have turned out much worse if not for the backlash incited by Daiz, herkz, and others who took point on Twitter and Reddit to bring attention to the issue. We as a community need to keep this up, as we simply cannot rely on anyone else at this point. Again, compared with the days of physical media, streaming is the Wild West, and nobody else is going to call out companies for failing to deliver better quality video than pirates. And to all those who have attempted to derail the conversation by saying you don't care about video encoding, or claiming we are somehow hurting Crunchyroll by pointing out these problems: keep it to yourself. You are contributing nothing to the conversation and ultimately you are only hurting yourself in the end.